Romania's opposition pledges tax cut to woo voters

BUCHAREST (Reuters) - Romania's new alliance of centre-right political parties is promising to cut the single corporate and personal income tax rate if it wins next month's election, saying it wants to attract more foreign investment to the European Union's second-poorest country.

The Alliance for the Romanian Right (ARD) has poll ratings of about 20 percent but could become part of a coalition if the ruling Social Liberal Union (USL) fails to achieve an outright majority on December 9.

The ARD is dominated by the Democrat-Liberal Party (PDL), which was in government until April but remains unpopular for enforcing austerity measures taken to comply with its 5 billion-euro IMF-led aid deal, including pay cuts and a hike in sales taxes.

The ARD pledged to cut the single rate tax to 12 percent, from the current 16 percent, and also lower employers' social contributions and raise the minimum wage.

"This means that more money will come to Romania, more foreign investment and Romanian companies will have more money for growth," the party said in a statement on Tuesday.

The governing USL has poll ratings of just over 50 percent but if it falls short of a majority President Traian Basescu could nominate a political ally from the ARD as prime minister to form a coalition.

The USL tried and failed to remove Basescu from office in the summer in a dispute which drew sharp criticism from the European Union and United States, which said the government was undermining the rule of law.

The ARD also said it would raise the minimum wage from 700 lei ($200) a month to 850 in 2013 and 1,000 in 2015 and cut companies' social security contributions by 5 percent, from the current level of about 30 percent, from 2015.